| 2022 in African fintech: Exploring the biggest African fintech stories that shaped the year | 
We’re delighted to share our first long-form piece of the year — a review of 2022 in African fintech. In this article, we explore the most important stories, trends, and themes in 2022 and what they might mean for the ecosystem in 2023. |
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| Nigeria | CBN revokes licenses of 132 Nigerian microfinance banks. The Central Bank of Nigeria (CBN) has withdrawn the operating licenses of 132 MFBs. According to the CBN, the shutdown was due to inactivity, improper use of the license, or a failure to comply with existing rules and obligations. Four mortgage banks and three finance companies were also affected by the CBN’s edict. TechCabal |
| | EDITOR'S NOTE | Microfinance banks, which were initially designed to offer accessible credit to consumers and small, local businesses, have evolved to become compliance cover for fintechs offering digital credit and banking services. MFB licenses also allow for direct access to payment infrastructure. These fintechs usually partner with an existing MFB until they can either acquire their own license or another MFB.
However, as we noted last year, there are important questions to be asked: "...becoming a bank requires strict compliance with very exhaustive regulatory requirements. Today, these MFB-type strategies act as cheap regulatory cover for product expansion but if everyone becomes a bank, how will regulators react to the trend? Will there be even more pushback on who can become a bank? Or will the regulations evolve to accommodate this new paradigm?"
The regulator seems to have started responding to these questions. Should we expect more scrutiny and even more regulations for this space? We'll have to wait and see. |
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| East Africa | dLocal secures new payment licenses in Kenya and Rwanda. dLocal, a payments company that processes payments in emerging markets for large, global merchants, has acquired new local payment licenses in Rwanda and Kenya. These licenses will enable dLocal to accept local payment methods in these countries. TechCabal |
| | EDITOR'S NOTE | According to dLocal's Q1 2023 earnings report, Africa and Asia comprise 28% of dLocal's revenue compared to 72% from LATAM. However, Africa & Asia revenue has grown almost 300% YoY compared to 26% from the LATAM region. With $39 million in quarterly revenue (almost 1500% growth YoY), Nigeria is now dLocal's biggest market by revenue.
As African countries face FX scarcity and introduce capital controls, the demand for cross-border payout solutions is rising. Recognizing this trend as evidenced by the growth of its Nigerian market, it’s no surprise that dLocal is deepening its investment in Africa with new licenses and capitalising on the increasing complexity of the market.
Expanding into more African countries will grow gross revenue, but acquiring licenses will simultaneously improve margins as they enable dLocal to cut out middlemen for much of their payment processing. It will be interesting to see how this pan-African expansion plays out. |
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| Africa | On Lazerpay's shutdown. Emmanuel Njoku, CEO of Lazerpay, sat down with Justin and Gwera of the Crypto@scale podcast to discuss the crypto payments company’s shutdown. The Flip |
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| Introducing Paystack Catalyst | 
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| South Africa | TymeBank raises $77.8 million in pre-Series C funding. The round for the South African digital banking platform was led by Norrsken22 and Blue Earth Capital, with participation from Tencent. The new funding will be used to further operations in South Africa and the Philippines, and for future expansion in Southeast Asia. TechCrunch |
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Share a tip | Do you have an announcement, event, or job posting you'd like to share, or have you come across an interesting bit of African fintech news recently? Hit reply and let me know! I might be able to include it in next week's newsletter. |
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